Your battle plan guide???
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Telegram messaging service to allow Tether stablecoin payments
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TETHER, the issuer of the world’s most used stablecoin, has teamed up with
TON Foundation to allow customers to send crypto payments using the popular
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41 minutes ago
SINGAPORE: Singapore stocks spiralled downwards on Friday (Feb 28) to a 15-month low, as global markets sold off on the rising possibility that the coronavirus outbreak would become a pandemic.
ReplyDeleteThe benchmark Straits Times Index tumbled 3.2 per cent to close at 3,011.08, after touching a 15-month low of 3,008.460.
Then can expect Depression 2.0 i.e. ten or more years of suffering
ReplyDeleteSurprised to receive this alert: VIX above 40
ReplyDeleteNot that VIX shot above 40, but that I totally forgot I had set this alert in the 1st place LOL!
15 to now 45 ... that's a 200% jump in just over a week!
Fear is now same as Aug 2015 & Feb 2018 :)
Spur,
DeleteThose who earned good "passive income" shorting the VIX all this time have to puke out everything and more...
Maybe I should follow Nasim Taleb in flushing money down the toilet every month to these yield hogs?
When we have a +-5 standard deviation move, we clean house!
LOL!
SMOL,
DeleteFinance news grapevine was talking about "50-cent man" coming back big into the market in Dec & Jan, buying cheap put options at 50 cents a piece. Same thing as in late-2017/early-2018. That guy (or more likely a big institution) must have made hundreds of millions with his big bets.
Hi SMOL,
DeleteDon't get what you mean by "follow Nasim Taleb in flushing money down the toilet every month to these yield hogs". Can explain? :D
Rainbow girl,
DeleteIts a bit like buying travel insurance.
When we returned home safely after a trip, the insurance premium we've paid has been flushed down the toilet ;)
Similarly, to protect our portfolios, we can buy cheap out-of-the-money Put Options to hedge against market declines (I prefer using futures).
So if the market never declines and goes up and up, our Put Options will expire worthless, flushing our option premiums paid down the toilet.
But if a +- 5 standard deviation event happened like last week, it will be like buying Toto $1 quickpick and hitting the Jackpot prize!!!
Who are the ones selling or writing Put Options to those flushing their money down the toilet?
Well, if you have attended any snake oil Options Trading Course, one popular "passive income" trade they teach is to encourage yield hogs bei kambings to write or sell Put Options.
Since 3 out of 4 options (some say 90%) expire worthless, you the "seller or writer" of these Put Options will get to collect these wonderful "passive income" just like that! Easy! Look! Even widows and orphans can do it!
Its what we call collecting pennies in front of a steamroller trade ;)
And it has worked wonderfully since 2009! Central banks got our backs!
Except everytime we have a huge volatility spike. And they you are wiped out :(
But no worries. There will always be new bei kambing cannon fodder every year. Just organise another free workshop preview!
Wash, rinse, and repeat.
P.S. Of course its different when institional traders write or sell Put Options. They hedge themselves. But then, some have been known to blowup too :(
Oh! Go read Nassim Taleb's books if you never heard of him.
DeleteHe is famous for making plane loads of money whenever a black swan event happens.
But as usual, he can do it does not mean we can do...
I'm definitely not in the camp of those who parrot just because "Yan can cook, so can you"!
Hi SMOL,
DeleteThanks for shedding so much light! I have not read his book but watched the book summaries of his book eg. The Black Swan.
Those who have been buying put options since the time they caught wind of the wuhan virus (before it came to SG) would be smiling right now. Too bad most bank brokerages like Vickers don't offer options. :(
"But as usual, he can do it does not mean we can do..."
ReplyDeleteYup, plus they don't do it with a significant part of their capital or portfolio. People like Taleb probably has 80+% in Treasuries & only uses 5% or less for his black swan positions. :P
Back in early 2018 when "50 Cent" earned his or her hundreds of millions when VIX shot to 100, Wall Street estimated he/she spent a couple of millions in the later part of 2017 buying all those OTM VIX calls, many of which probably expired worthless on the way to the blowup.
Don't think normal retail can just flush a few millions buying cheap VIX! LOL! And, what is not clear is that very likely "50 Cent" is an institutional protecting a multi-billion dollars of long stocks. ;)
A million bucks on a billion portfolio ... yup, that's insurance premium. Many of us spend much more then that on our own insurance, for much lesser pay off!! Kekeke!!!
Spur,
ReplyDeleteThat's where insurance companies/agents make good money - retail bei kambings often overpaid for Life protection (kiasi mah or like the recent hoarding of toilet papers).
But when it comes to protecting their investment portfolios?
Zero.
Look mom! I'm gone commando!
temperament,
ReplyDeleteFantasic!
Do you know this is the clearest comment you've said?
Its all about what temperament has to say; not hiding behind this so and so said this and that ;)
Have you noticed you have a habit of "hedging" when it comes to making comments?
This comment of yours is sexy as there's NO HEDGE!
:)
temperament,
ReplyDeleteYou are the most senior here. And have been through more bull/bear cycles than anyone of us.
I really love to listen to your experiences and what you really think. Never mind if we disagree. Like you say, we are all different ;)
I like to poke you is because I want you to reveal what you really think or feel :)
You often like to say this and this; then on the other hand, that and that...
Got say like never say???
Say what you really think!
Like the comment above. You don't hedge. Period.
That's cool too!
Its fun when we are like the 8 immortals crossing the Eastern Sea. We do it our own way ;)
That's what makes the discussion here and at my watering hole fun!
Stocks rebounded sharply from their worst week since the financial crisis on Monday, with the Dow Jones Industrial Average posting its best day in more than a decade. Expectations that the Federal Reserve would cut rates drove the gains, which accelerated aggressively into the close.
ReplyDeleteThe Dow closed 1,293.96 points higher, or 5.1%, at 26,703.32. The move on a percentage basis was the Dow’s biggest since March 2009. It was the largest-ever points gain for the 30-stock average.
The S&P 500 climbed 4.6% — its best one-day performance since Dec. 26, 2018 — to close at 3,090.23. The Nasdaq Composite also had its best day since 2018, surging 4.5% to 8,952.16.
Monday’s gains snapped a seven-day losing streak for the Dow.
Apple shares led the Dow higher with a 9.3% jump; Merck and Walmart gained 6.3% and 7.6%, respectively. Utilities, tech, consumer staples and real estate all rose more than 5% to lead the S&P 500 higher.
The major averages were coming off a massive decline from the week before as worries over the coronavirus spreading dented investor sentiment.
Lower and lower interest rate can simulate consumer spending when more and more people hiding at home and staying away from crowd?
ReplyDeleteHi Uncle Temperament,
ReplyDeletewhat's 3 B order?
Negative int doesn't work then maybe QE again?
Ah ha! So warchest is a hedge. For the not-so-trade-savvy ones. :)
ReplyDeleteRainbow,
ReplyDeleteHedging with Cash
I'm not as organised as CW.
One day when I very free I may write and e-book on Trading 101 ;)